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Jubilee eyeing CAML tailings model

South Africa and Zambia chrome, PGM and base metal company spending $5m on copper tailings deposit
June 18, 2020

Jubilee Metals (JUB) is hoping to follow in Central Asia Metals’ (CAML) footsteps by buying into a copper resource in Zambia. While the Africa-focused company won’t get full ownership of the waste deposit, it is also only putting up $600,000 (£481,000) in cash, on top of $4.4m in shares for 75 per cent of earnings from the project until 1.5 times its investment is paid off. The project is also a tailings deposit, meaning the ore has been processed, compared to the waste model CAML uses at its Kounrad mine in Kazakhstan, which extracts copper from material taken from the mine but not processed. 

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Jubilee already owns a copper refinery in Zambia, which it bought from Glencore (GLEN) last year for $12m. 

The company will need to build a concentrator at the site of the new tailings resource, with the capital cost of this plus other work needed around $35m. 

Chief executive Leon Coetzer said the resource was typical of tailings deposits in Zambia, which have a grade of around 0.4 per cent copper. He said the cost was “very fundable” from current cash flows. 

Annual production once the concentrator is built could be 14,000 tonnes (t) a year, similar to CAML’s Kounrad operation. Tailings reprocessing is attractive if the grade is right because of its low cost, compared to new or brownfield mines. CAML’s cash costs are under around 50c per pound, far less than even large-scale miners. 

Mr Coetzer said Jubilee had looked at plenty of similar tailings deposits as part of a World Bank clean-up programme, and that this acquisition would be “one of quite a few to come”. He also flagged expansion outside Zambia and South Africa, where Jubilee has platinum group metal (PGM) and chrome holdings. 

Jubilee shares were up 4 per cent on the news.